How many Lucky Star cartons are sold in South Africa every day

Lucky Star-owner Oceana reported solid results for the year ended 30 September 2024, with improved fish oil and hake sales being offset by lower fishmeal sales. 

Oceana is the largest fishing company in South Africa, with operations in the USA. It operates 54 vessels and eight production facilities across these countries and sells its products in 41 states. 

In particular, its US operations have proven to be extremely lucrative, having a record financial year and contributing 72% of the company’s entire operating profit.

Despite revenue growth remaining flat year-on-year, only increasing by 0.7%, the company greatly enhanced its operating efficiency to grow its profit margins. 

Profit after tax grew by 12.5% to R921 million, while headline earnings saw similar growth of 13.5% compared to the prior financial year. 

The growth was driven by record earnings from Daybrook in the US margin expansion at Lucky Star Foods and a strong turnaround in the Hake operations. 

The Group’s performance was negatively impacted by weaker results from the African fishmeal and fish oil business due to lower volumes and poor horse mackerel performance resulting from a major vessel breakdown. 

Gross profit margin increased by 320 basis points to 31.8% (2023: 28.6%), attributable to a favourable mix of higher-margin fish oil sales and enhanced margins from Lucky Star Foods. 

Oceana had previously invested heavily in improving the efficiency of its Lucky Star operations, upgrading its cannery and implementing various cost-saving measures. 

The company also kept a tight lid on the growth of its sales and distribution expenditure and minimised increases in overheads to slightly above inflation. 

However, its overhead costs face continued upward pressure from higher insurance premiums to cover its operations in South Africa. 

The heavy investment in operating efficiencies at Lucky Star and Daybrook also resulted in the company taking on additional debt, increasing its interest expense to R226 million. 

Margins were also negatively impacted by lower catch and production volumes in both the fishmeal and fish oil and horse mackerel operations.

Lucky Star continues to be Oceana’s crown jewel, selling 9.3 million cartons in the past financial year. This is slightly below its record of 9.6 million cartons but still amounts to over 25,000 cartons a day. 

However, while Lucky Star continues to drive sales, Daybrook in the US has turned out to be an immensely lucrative business, contributing 72% of the company’s operating profit. 

The company expects its fishmeal and fish oil businesses are expected to face headwinds due to softening global fishmeal and fish oil prices resulting from normalised global supply levels. 

With the modernisation of the South African fishmeal operations complete, this segment is well-positioned to leverage industrial fish resources, driving operational efficiencies and product quality. 

Recent biomass stock assessment reports validate the health and resilience of the Gulf Menhaden resource, which will support the drive to increase catch volumes in the US.

As South Africa’s economic outlook improves, a recovery in consumer spending is expected to support Lucky Star Food’s growth strategy focused on affordability and availability. 

The recent cannery upgrades will yield increased throughput and cost efficiency, enabling sustained affordability. 

Leveraging the brand’s iconic status and distribution reach, Lucky Star Foods will continue to diversify into complementary canned food and adjacent food categories.

Following a year of significant capital expenditure, the Group will focus on realising the benefits of this investment. As a result, capital expenditure is expected to revert to normalised levels going forward.